Financial Data and Key Metrics Changes - Revenues for Q3 2025 were $11.6 million, representing a 57% increase year-over-year and a 3% sequential gain over Q2 2025 [5][16] - Gross margin for the quarter was 84%, down from 86% in the prior year, primarily due to lower manufacturing efficiency associated with newly launched products [17] - Operating loss for the quarter was $9 million, compared to $8.7 million in the prior year, driven by one-time charges related to clinical studies [18] - Cash used in operations was $3.7 million, a significant improvement from $11.2 million in Q3 2024 [19] - Adjusted EBITDA loss improved to $5.4 million from $7.1 million in the prior year [19] Business Line Data and Key Metrics Changes - The commercial organization increased the number of unique ordering accounts by 30% compared to Q3 2024, adding 20 new accounts [16] - The reimbursement use of TriNav technology within the radioembolization market has effectively doubled due to the introduction of a new CMS code [6][7] - The company launched the TriNav Flex infusion system and advanced new clinical applications to expand market opportunities [5][6] Market Data and Key Metrics Changes - The company is experiencing strong commercial momentum in the complex liver embolization market, supported by the new CMS HCPCS code C8004 [6][7] - Early feedback from key accounts indicates strong clinical and economic advantages from the expanded reimbursement, expected to drive adoption into 2026 [7] Company Strategy and Development Direction - The company is focused on expanding its TriNav platform and investing in long-term growth through increased commercial resources and funding for new applications [6][8] - Trisalus aims to leverage its pressure-enabled drug delivery (PEDD) technology across a wide range of solid tumors and interventional treatment approaches [8][15] - The company is also preparing to launch a clinical trial evaluating TriNav and genicular artery embolization (GAE) for knee osteoarthritis [12][43] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed a 50% revenue growth guidance, reflecting confidence in growth momentum and market opportunities [7][21] - The company is excited about the current momentum, especially in Q4, and is focused on maintaining its growth trajectory [21][27] - Management highlighted the potential of GAE as a significant market opportunity, potentially rivaling the liver market [42][43] Other Important Information - The company simplified its capital structure through a successful exchange offer and consent solicitation for preferred stock [6] - Cash and cash equivalents at the end of the quarter were $22.7 million, providing ample liquidity for operations and strategic objectives [19] Q&A Session Summary Question: Insights on 2026 growth expectations - Management is confident about current momentum and maintaining guidance of 50% growth and adjusted EBITDA positivity in the first half of next year [21] Question: Growth in other indications outside liver - The company is investing in new applications, particularly in uterine artery embolization, which is expected to reduce procedural time and pain [22] Question: Gross margin outlook - Management expects an uptick in gross margins in Q4 as manufacturing efficiencies improve [33] Question: Adoption of new products - The TriNav Flex has been well received, with significant adoption in selective treatments and larger territory treatments [38] Question: Utilization trends for accounts launched at different times - Accounts launched 18 months ago continue to improve month over month, with faster ramps for those familiar with the technology [44]

Financial Data and Key Metrics Changes - As of September 30, 2025, the company reported cash and cash equivalents of $8.3 million, which does not include a recent $2 million milestone payment received in October 2025 [12] - The net loss for the third quarter of 2025 was $15.8 million, an increase from a net loss of $10.6 million in the same quarter of 2024, primarily due to the absence of collaboration revenue recorded in 2024 [12][13] - Research and development (R&D) expenses decreased to $9.5 million in Q3 2025 from $16.4 million in Q3 2024, driven by reduced program development costs and lower headcount-related expenses [13] - General and administrative (G&A) expenses were $4.2 million for Q3 2025, down from $5.9 million in Q3 2024, attributed to reduced personnel costs [14] Business Line Data and Key Metrics Changes - The company is preparing to initiate a phase 3 study for OSV, which has shown promising clinical activity in heavily pretreated patients with HPV-positive oropharyngeal squamous cell carcinoma (OPSCC) [5][7] - The dual CAB, EpCAM, T-cell engager program is progressing well, with preliminary data indicating a manageable safety profile and encouraging signs of tumor reductions across various indications [10] Market Data and Key Metrics Changes - The worldwide peak sales estimate for OSV in second-line and later OPSCC is approximately $800 million, with the total worldwide OPSCC market projected to reach $3 billion by 2032 [7] - The broader HPV-positive solid tumor market, including cervical cancer, is valued at over $7 billion globally [8] Company Strategy and Development Direction - The company is in advanced stages to finalize a strategic transaction with a potential partner by year-end, indicating a focus on collaboration and partnerships [4][5] - The company aims to address critical unmet needs in oncology through its prioritized programs, particularly the dual CAB, EpCAM, TCE program, which has the potential to treat over 1 million adenocarcinoma cancer patients annually [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming phase 3 trial for OPSCC, which addresses a significant unmet need and represents a substantial commercial opportunity [15] - The company anticipates key clinical trial readouts in the first half of next year, with several important events related to its programs throughout 2026 [15] Other Important Information - The company achieved FDA alignment on the phase 3 OSV registrational trial design, which includes dual primary endpoints of overall response rate and overall survival [4][5] - A development milestone was achieved under the license agreement with Context Therapeutics, validating the T-cell engager platform [5] Q&A Session Summary Question: Can you provide details on the patient number for the ROR-2 program's phase 3 study and control arm stratification? - The pivotal trial design for full approval involves approximately 300 patients, with an interim analysis for accelerated approval occurring earlier [18][19] Question: What data can be expected from the 3182 program next year? - The next data output is anticipated in the first half of next year, with comprehensive reporting on additional dose and schedule evaluations [21][22]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $3.5 million, reflecting a 19% increase compared to Q3 2024, driven by an increase in the number of CapsoCam Plus capsules sold [15] - Gross margin was 54% for the quarter, consistent with expectations as the company scales [15] - Net loss for Q3 2025 was $7.9 million, compared to a net loss of $5.8 million in Q3 2024 [16] - Cash and equivalents at the end of the quarter were $17.8 million, an increase from $1.1 million at June 30, 2025, following the completion of the IPO [16] Business Line Data and Key Metrics Changes - CapsoCam Plus has been used by over 151,000 patients, with approximately 8,336 patients using the system in Q3 2025, representing a 20% year-over-year growth [11] - New account generation grew by 31% in Q3 2025 compared to the same quarter in 2024, indicating strong physician adoption [14] - A 24% increase in GI clinics and mega GI groups was noted in Q3 2025 over the same quarter last year [14] Market Data and Key Metrics Changes - The company is gaining traction in hospitals and GPOs, with a 26% increase in hospital system customers over the prior year [14] - The U.S. direct sales team included 26 representatives, supported by seven regional sales managers and trainers as of September 30, 2025 [12] Company Strategy and Development Direction - The long-term vision is to deliver an ingestible capsule that can screen for multiple cancers in a single non-invasive procedure powered by advanced imaging and AI [4] - The company is investing in AI to improve existing products and plans to submit an application to the FDA by year-end 2025 for AI technology incorporation into CapsoCam Plus [5][6] - CapsoVision is pursuing Breakthrough Device Designation for its non-invasive capsule endoscopy system to enable earlier detection of pancreatic ductal adenocarcinoma [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the momentum across the business, highlighting commercial growth, pipeline expansion, and advancements in AI-assisted diagnostics [18] - The application for Breakthrough Device Designation reflects the urgent need for early detection of pancreatic cancer and the promise of the company's technology [18] - The company is strengthening its leadership team and executing a clear growth plan following a successful IPO [19] Other Important Information - The company has a development agreement with Canon Incorporated to design next-generation CMOS imaging sensors, marking a key step in advancing its innovation pipeline [16] - R&D expenses related to the Canon agreement were $1.6 million for Q3 2025, considered a one-time charge [15] Q&A Session Summary Question: Impact of AI feature submission on other milestones - Management indicated that the FDA review typically takes three to six months, so the approval should be available in the second half of the year [22] Question: Operating expenses related to Canon agreement - The $1.6 million expense for R&D for Canon is a one-time charge, and future core R&D expenses should be lower [23] Question: Clinical data for breakthrough designation application - A small feasibility study conducted six years ago showed promising results, with two out of 20 subjects diagnosed with cancer [28] Question: Timeline for Canon CMOS sensor - The pivotal study for pancreatic cancer will proceed without waiting for the Canon sensor, which is expected to be ready in 2026 [35] Question: Commercial organization headcount - The current sales team will be maintained, with plans to add two additional territories in 2026 as needed [36]

Financial Data and Key Metrics Changes - The company's Q3 2025 revenue was $1.2 million, down 16% year-over-year due to decreased sales of M400 smart glasses [18] - Engineering services revenues were $0.3 million, down from $0.4 million in the prior year's period [18] - The net loss for Q3 2025 was $7.4 million or $0.09 per share, compared to a net loss of $9.2 million or $0.14 per share for the same period in 2024 [21] - Cash and cash equivalents as of September 30, 2025, were $22.6 million, up from $17.5 million as of June 30, 2025 [21] - Total operating expenses for Q3 2025 declined by $1.8 million or 20% to $7.1 million compared to $9 million in the prior year [20] Business Line Data and Key Metrics Changes - The OEM and defense business is accelerating, with revenue contributions expected to begin in Q4 2025 from military applications [8] - The enterprise segment, which currently accounts for the majority of revenue, is seeing increased interest in AI-enabled smart glasses [9] - The company is transitioning into production deliveries for military applications, with a six-figure development order expected to be delivered in Q4 [8] Market Data and Key Metrics Changes - Demand for high-quality color waveguides is rising, with Vuzix positioned to serve this market [7] - The company has signed NDAs with multiple ODMs and micro-display makers, indicating strong market interest [6] Company Strategy and Development Direction - Vuzix is focusing on ramping production capacity in collaboration with Quanta Computer, aiming for significant volume increases in the future [5][26] - The company is developing advanced high-index materials for waveguides to meet future performance requirements [10] - The introduction of the LX1 smart glasses is part of a strategy to expand the product portfolio and cater to different customer needs [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the increasing momentum in business and revenue for Q4 2025 [9] - The company is focused on maintaining a disciplined cost structure and converting inventories into cash to support operations through 2026 [22] - Management noted that the Amazon program is expanding significantly, indicating strong potential for future revenue growth [34] Other Important Information - The company has welcomed Dr. Chris Parkinson as President of Enterprise Solutions, aiming to enhance the enterprise sales strategy [10] - The company has no current or long-term debt obligations outstanding, providing a strong financial position [21] Q&A Session Summary Question: Discussion on Quanta's capacity ramp - Management confirmed ongoing discussions with Quanta to increase production capacity beyond the current one million waveguides per year, with potential for millions as the market grows [26] Question: Timeline for capacity ramp discussions - Management indicated that while discussions are ongoing, it may take time to establish new production lines, with updates expected in the coming quarters [27] Question: Clarity on defense industry volume ramp - Management stated that production waveguides are being shipped in Q4, with expectations for increased revenue from OEM business [28] Question: Expansion of defense contractor customer base - Management anticipates rapid development and production ramp-up for existing programs, with potential for additional contracts in 2026 [29] Question: Update on the Amazon program - Management highlighted the successful rollout of Vuzix glasses in Amazon's operations, with plans for further expansion into new applications [34] Question: Gross margins outlook - Management noted that new products like the LX1 have better margin models, and higher margins are expected in 2026 as the product mix improves [36]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $142 million, a decrease of 15% compared to $166 million in Q3 2024, primarily due to a one-time favorable claim settlement contributing $31 million in the prior year [16][17] - Adjusted EBITDA for Q3 2025 was $4 million, down from $30 million in Q3 2024, influenced by the one-time GGB project settlement [20] - The company reported a net loss of $4 million for Q3 2025, compared to a net loss of $2 million in Q3 2024 [20] Business Line Data and Key Metrics Changes - Revenue from Shimmick projects was $107 million, a 5% increase year-over-year, while non-core project revenue was $35 million, a decrease of 46% [17][19] - Gross margin for Shimmick projects was $10 million, up 61% compared to $6 million in Q3 2024, while gross margin for non-core projects was $1 million, down from $6 million [18][19] Market Data and Key Metrics Changes - The company achieved $1 billion in bidding volumes in September and October, indicating a robust pipeline [8] - The backlog grew by over $100 million, or 15% sequentially, reaching $754 million as of October 3, 2025 [12][21] Company Strategy and Development Direction - The company's strategy focuses on growing the top line through strategic new business, completing non-core projects, and implementing operational improvements [4][5] - The company aims to increase the percentage of negotiated work in its backlog to 50% by 2027, balancing risk and revenue generation [38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's trajectory, citing strong market conditions and backlog growth as key drivers for future performance [14] - The company anticipates that the completion of non-core projects will positively impact cash flow and overall financial health by 2026 [30] Other Important Information - The company maintained a strong liquidity position with total liquidity of $48 million at the end of Q3 2025 [21] - The company reaffirmed its full-year 2025 guidance, expecting Shimmick project revenue in the range of $405 to $415 million [23] Q&A Session Summary Question: Can you discuss the growth of Axia and its representation in the backlog? - Management indicated that Axia currently represents about 15-16% of the backlog, with growth expected in electrification-related work and industrial electrical projects [27][28] Question: What is the status of data center projects and their market activity? - Management noted active bidding in Texas and other regions, with a significant demand for data center projects [29] Question: Can you elaborate on cash flow dynamics and future trends? - Management acknowledged the negative impact from non-core legacy projects but expects improved cash flow as backlog increases and translates into revenue [30][31] Question: What gives confidence for a strong fourth quarter? - Management attributed confidence to new higher-margin work starting to kick in, offsetting lower-margin non-core projects [34][35] Question: How is the transition to more negotiated work progressing? - Management reported that negotiated work is becoming a larger portion of bidding activity, with a goal of achieving a 50% mix in the future [36][38]

Financial Data and Key Metrics Changes - Rekor Systems reported record revenue of $14.2 million for Q3 2025, a 35% increase compared to Q3 2024 and a 15% increase compared to Q2 2025 [6] - Year-to-date revenue reached $35.8 million, up 9% from the first nine months of 2024 [6] - Adjusted gross margin improved to 63% in Q3 2025 from 44% in Q3 2024, and year-to-date adjusted gross margin was 55% compared to 48% in the prior year [7][8] - Adjusted EBITDA loss for Q3 2025 was $1.5 million, an improvement of $7.9 million or 84% from Q3 2024 [8][9] Business Line Data and Key Metrics Changes - Recurring revenue for Q3 2025 totaled $6.5 million, an 18% increase compared to Q3 2024, while year-to-date recurring revenue was $17.5 million, up 5% year over year [7] - The company continues to focus on expanding its recurring revenue base through long-term software and data-as-a-service subscription contracts [7] Market Data and Key Metrics Changes - Rekor secured a significant multi-year contract with the Georgia Department of Transportation valued at a minimum of $50 million, marking a major milestone for the company [11] - The company received recognition for its work in South Carolina, where its technology powers a virtual weigh station network, achieving nearly 100% accuracy in overweight truck targeting [11] Company Strategy and Development Direction - Rekor is entering the global deepfake detection market, leveraging its experience in video analytics for government agencies and law enforcement [12] - The company is focusing on a data-as-a-service business model, which is proving to be a major differentiator in the market [13] - Rekor aims to strengthen its Scout business with the appointment of Jennifer Candelaria as General Manager, focusing on market share expansion and revenue growth [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about Rekor's future, highlighting the strong performance and momentum built across technology platforms and customer base [5][15] - The company anticipates continued growth driven by the increasing demand for data-as-a-service solutions and operational efficiencies [10][20] Other Important Information - The company has reduced total operating expenses by 24% quarter over quarter, reflecting discipline and cost containment [8] - Rekor is actively engaged with customers in Europe and plans to expand its business outside the U.S. in 2026 [52] Q&A Session Summary Question: What type of product does the Rekor team envision developing with the deepfake detection division? - Management indicated that the product is being developed by Rekor Labs, and more details will be shared closer to the product launch in 2026 [17][18] Question: How should we think about the EBITDA trajectory and margins over the next several quarters? - Management expects margins to stabilize higher than current levels as the company continues to focus on the data-as-a-service business model [20] Question: Do you see many other contracts similar to the Georgia contract in your pipeline? - Management noted that states often follow each other's procurement processes, and they are seeing unprompted RFPs for their business model [22] Question: Is Austin starting to ramp up with the Command contract? - Management confirmed that Austin has issued a purchase order under the RFP won by Rekor, and they are working to expand into other districts [30][31] Question: Do you expect a full ramp-up portion of the new Georgia contract in the fourth quarter? - Management confirmed that the Georgia contract is in effect since October, and they anticipate billing under the new contract [42] Question: Can you give feedback on the international market engagement? - Management stated that they are actively engaged with customers in Europe and hope to do business outside the U.S. in 2026 [52] Question: Do you believe profitability is what is holding the elevation in the share price? - Management acknowledged the challenges of being a small public company but expressed confidence in the company's ability to drive revenue and profitability [57]

Financial Data and Key Metrics Changes - In Q3 2025, the company's revenue was $29.8 million, down from $33.6 million in the same quarter last year, which included a one-time $3 million increase from a licensing agreement [7][8] - Net income rose to $6.9 million from $4.0 million a year ago, and adjusted EBITDA increased to $11.9 million compared to $11.2 million last year [7][8] - Net margin improved to 23.2% and EBITDA margin improved to 39.9%, compared to 11.9% and 33.3% in the same quarter last year [8][9] - The trailing 12-month income from continuing operations was $30.5 million, resulting in earnings per share of $0.64, with a price-to-earnings ratio of over 7.0 times based on a share price of $4.87 [9][10] Business Line Data and Key Metrics Changes - The company faced significant traffic volatility due to algorithmic changes, particularly affecting lifestyle and sports categories, but has seen stabilization and recovery in e-commerce-related content [11][12] - The entrepreneurial publishing model allowed the company to maintain profitability and cash generation despite traffic challenges [12][14] - The company acquired digital assets of ShopHQ and Lindy Sports for $2 million, expanding its e-commerce and sports portfolios [12][13] Market Data and Key Metrics Changes - The company reported that its brands, including Parade, Athlon Sports, TheStreet, and Men's Journal, collectively reach over 100 million users per month [12] - The company is registering over 40,000 new users daily, indicating a strong growth in audience engagement [13][14] Company Strategy and Development Direction - The company is focused on a disciplined M&A strategy, targeting at least one high-value acquisition per quarter to enhance its IP and brand ecosystem [12][13] - The entrepreneurial publishing model is expected to expand into video and social commerce opportunities, leveraging data and AI to build higher-margin revenue streams [13][14] - The company aims to connect user behavior and data across various platforms to enhance monetization opportunities [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the ongoing industry-wide traffic headwinds but expressed confidence in the company's ability to adapt and maintain profitability [5][11] - The company is optimistic about growth in e-commerce content and expects stabilization and potential growth in news-related content [18][19] - Management emphasized the importance of generating cash and profits, focusing on long-term value creation rather than short-term expediency [24][48] Other Important Information - The company generated $12.1 million in cash from operations during Q3 and reduced total debt by over $10 million year-to-date, strengthening its liquidity position [10] - The company is actively pursuing refinancing options for its outstanding debt, aiming for favorable terms to enhance shareholder value [24] Q&A Session Summary Question: How has the company managed through algorithmic changes and what is the outlook for Q4? - Management noted that they have focused on optimizing content signals and technical SEO, leading to stabilization and expected growth in e-commerce content [18][19] Question: Has the company taken market share during this period of volatility? - Management believes they have weathered the storm better than most competitors and continue to generate cash, indicating a strong position relative to the industry [20] Question: What is the company's approach to refinancing and share repurchase? - Management stated that refinancing is a priority, approached from a position of strength, and they intend to repurchase shares when capital allows and the stock is undervalued [23][39] Question: Can you elaborate on the ShopHQ acquisition and its business model? - Management explained that ShopHQ operates on a drop-shipping model, leveraging valuable data and email lists to drive sales without holding inventory [30][34] Question: What metrics does the company use to measure success in converting content consumers to commerce buyers? - Management focuses on customer acquisition costs and the ability to translate media properties into commerce opportunities, emphasizing cash generation and profitability [48]

Financial Data and Key Metrics Changes - In Q3 2025, revenue was $16.5 million from 130 units shipped, down from $18.4 million from 135 units in the previous quarter, but up from $15.8 million from 94 units a year ago [18] - GAAP gross margin was 15.3%, an increase from 8.8% in Q2 2025 but a decrease from 18.1% in Q3 2024 [19] - Operating loss for the quarter was $7 million, the lowest since going public, down from $7.1 million in Q2 2025 and $9.7 million in Q3 2024 [20] - Non-GAAP operating loss was $4.8 million, also a record low, compared to $6.9 million in Q2 2025 and $6.6 million in Q3 2024 [21] Business Line Data and Key Metrics Changes - The company shipped 130 vehicles in Q3 2025, including 10 strip chassis for a major customer program, with revenue from these expected in future quarters [5] - The company delivered 18 powertrain systems to Bluebird Corporation in Q3 2025, with nearly 80 additional powertrain orders received since the quarter-end [9][10] Market Data and Key Metrics Changes - The company noted strong demand from major customers like UPS and FedEx ISPs, indicating a growing scale and returning customer confidence [5] - The Xos Hub, a mobile energy platform, is gaining traction in various segments, including electric trucks and school buses, with deployments accelerating in Q3 2025 [11] Company Strategy and Development Direction - The company is expanding into higher-margin, lower-concentration categories, including powertrains and energy infrastructure, to diversify its product offerings [9] - The focus is on building deeper relationships with customers and larger programs to create repeatable volume, which is seen as foundational for long-term growth [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to improve margins over time as production scales and cost reduction initiatives are executed [20] - The company anticipates significant opportunities in 2026, with expectations of increased order sizes and a growing product pipeline [12] Other Important Information - The company amended its $20 million convertible note to enhance liquidity, allowing for quarterly principal payments starting in Q4 2025 [23] - Positive free cash flow of $3.1 million was generated in Q3 2025, marking the third time the company has been free cash flow positive since going public [24] Q&A Session Summary Question: What is the expanded opportunity for the hub platform? - Management expects double-digit growth in the EV charging segment, with significant opportunities in power resiliency and backup power applications [30][32] Question: Can you discuss the accelerated growth in chassis deliveries to Bluebird? - The partnership with Bluebird is strengthening, with positive customer feedback and additional orders expected as new powertrain configurations are developed [33][35] Question: What are the expectations for unit deliveries in Q4? - Seasonal delays are anticipated in Q4 due to peak delivery volumes for major customers, but the company expects to remain within its guidance range [36] Question: How is the company managing tariff impacts? - A multi-step approach is being taken to mitigate tariff volatility, including reshoring and working closely with suppliers and customers to share costs [43][45] Question: What are the expectations for margin improvement in 2026? - While specific guidance for 2026 has not been provided, management believes there will be a noticeable improvement in margins due to a favorable mix shift towards higher-margin products [59][61]

Financial Data and Key Metrics Changes - Red Cat reported record revenues of $9.6 million for Q3 2025, a 200% increase from Q2 2025, and a significant rise from $3.2 million in Q2 and $1.6 million in Q1 2025 [4][12] - Gross profit for Q3 2025 was $638,000, up from $375,000 in Q2 2025, and a substantial improvement from a gross loss of $392,000 in Q3 2024, reflecting a margin of 7% compared to a gross loss margin of 30% in the same quarter last year [12][13] - The company ended the quarter with $212.5 million in cash and receivables, positioning it well for future growth and obligations [16] Business Line Data and Key Metrics Changes - The Limited-Rate Initial Production (LRIP) contract for the Black Widow system has expanded to $35.1 million, with total contracts for the U.S. Army approaching $40 million for 2025 [5][6] - The launch of the Blue Ops division, focused on uncrewed surface vessels (USVs), is expected to generate significant new revenue opportunities, with potential pricing between $750,000 and $1.5 million per unit [7][18] Market Data and Key Metrics Changes - Demand for drones has significantly increased, particularly from the U.S. Army, which is looking for millions of drones [10][19] - The approval of the Black Widow system for the NATO NSPA Catalog opens new market opportunities with NATO members and partner nations [6] Company Strategy and Development Direction - The company is focused on expanding its manufacturing capabilities, having doubled its manufacturing space in Salt Lake City and Los Angeles, and is on track to scale drone output to 1,000 units per month by early 2026 [16][18] - Strategic partnerships with Palantir and AeroVironment are expected to enhance revenue growth and operational capabilities [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about recovering revenue from delays caused by government shutdowns and budget approvals, with Q4 expected to see revenues between $20 million and $22 million, representing a sequential increase of 170% [17][19] - The company anticipates continued strong growth driven by the ramp-up of Black Widow production and FANG system deliveries following Blue UAS certification [17] Other Important Information - The company has invested approximately $6 million into R&D in Q3 2025, a 66% increase over Q2, to support technological advancements in various areas [14][15] - General and administrative expenses rose to $9.2 million in Q3 2025, a 48% increase over Q2, to support the larger organization and the establishment of the Blue Ops division [15] Q&A Session Summary Question: Update on full-rate production order - Management indicated that the expectation for securing the full-rate production order by the end of the year has been affected by the government shutdown, with the size of the opportunity still uncertain [23] Question: Revenue opportunity from boat shipping - Management stated that selling 200 boats at the lower end of pricing could generate $150 million in revenue, with expectations for robust demand in 2026 [24][25] Question: Impact of six to seven-week delay on revenue recognition - Management explained that the delay shifted revenue recognition but did not change demand, with the only significant difference being the need to reconfigure the FlightWave Edge 130 [29][31] Question: Inventory increase - Management clarified that the inventory increase was primarily due to raw materials and parts for Black Widow production, not finished goods [32][35] Question: Blue Ops sales cycles and visibility - Management highlighted that there are significant opportunities in the 2026 budget for shipbuilding and USVs, with a mature platform compared to competitors [36] Question: Expectations for gross margin in Q4 - Management expects gross margins to increase to around 10% in Q4, projecting towards 20% by the end of next year as production scales up [40][41]

Financial Data and Key Metrics Changes - Revenue for Q1 2026 was $13.2 million, down from $16.1 million in the same quarter last year, primarily due to a pause in customer orders related to tariff uncertainty and macroeconomic concerns [10] - Gross margin decreased to 28.6% from 32.4% in the prior year, attributed to lower sales and a shift towards lower energy capacity products with lower gross margins [10] - Net loss for the quarter was $2.6 million, or $0.15 per share, compared to a net loss of $1.7 million, or $0.10 per share in Q1 2025 [11] - Adjusted EBITDA was negative $1.7 million, worsening from negative $0.4 million in the same quarter a year ago [11] - Cash and cash equivalents at the end of the quarter were $1.6 million, up from $0.6 million a year ago [11] Business Line Data and Key Metrics Changes - The company secured multi-million dollar orders totaling $2.4 million from top material handling customers, indicating a rebound in order activity [4] - The customer base in the airline sector doubled, now serving eight major North American airlines [5] Market Data and Key Metrics Changes - The company received UL 1973 listing for its 80-volt intelligent batteries, unlocking new opportunities in various industries including agriculture, oil and gas, and pharmaceuticals, representing a total addressable market of around $1 billion [7][8] Company Strategy and Development Direction - The company has established five strategic initiatives: profitable growth, operational efficiencies, solution selling, building the right products, and integrating value-added software to generate recurring revenue streams [5] - Recent capital raises totaling $13.8 million will be used for working capital and to accelerate product development, aiming to improve margins [6][12] Management's Comments on Operating Environment and Future Outlook - Management noted a temporary pause in customer orders due to tariff uncertainty but indicated a rebound in order activity in the second fiscal quarter [4] - The company is optimistic about achieving profitable growth in the coming quarters, supported by recent operational efficiencies and capital raises [13] Other Important Information - The company retained its NASDAQ listing and is committed to maintaining compliance for broad access to its common stock [6] - The Sky MS 2.0 SaaS platform has graduated to paying customers, with plans to add new AI-driven operational features [9] Q&A Session Summary Question: Order trends post-quarter and strength into the fourth quarter - Management acknowledged a rebound in orders, highlighting $2.4 million in orders from the material handling industry and a significant airline order, while noting ongoing headwinds from tariffs and a government shutdown [18] Question: Ground support equipment market investment and further penetration - Management reported continued adoption of clean energy solutions in the ground support equipment market, with no pushback from airlines on transitioning to lithium, and expressed optimism for increased orders as airlines deploy lithium solutions [19]